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I have a friend back in Baltimore who did a 30 year ARM right toward the end of the bubble. Her rate tripled after the housing bubble blew up and the bank was not willing to refinance to a fixed rate mortgage. It was cheaper for her to do a planned buy back than it was for her to go through bankruptcy. She actually ended up renting the house from the bank once the bank took the house over.

She'd be the first to tell you it was her fault she got into that mess.

Wicked -- since you were in the Navy, you need to take advantage of the VA loans you can get once you decide to buy. All but one of my houses were done via the VA and I have a low rate fixed rate of 3.45% on my current home.

WARNING: This post may contain material offensive to those who lack wit, humor, common sense and/or supporting factual or anecdotal evidence. All statements and assertions contained herein may be subject to literary devices not limited to: irony, metaphor, allusion and dripping sarcasm.

Re: This really erked me this weekend...

I have a friend back in Baltimore who did a 30 year ARM right toward the end of the bubble.

I've never understood why anybody would do an ARM on anything.

It's like gambling with your life.

I guess the appeal is the very low interest rate to suck you in, but to think that the rate won't change because the current (at the time) economic climate is so good is insane to me.

I've always been someone that wanted to know exactly or pretty damn close to what my payment was going to be for the duration of a loan I have taken out.
I don't like surprises at all!!

Even with a fixed rate loan there are still fluctuations due to taxes, insurances. etc. that cause increases due to escrow (sp?) shortages, etc., but nothing that is devastating the way a lot of those loans were that got so many people in trouble.

I'm no economic guru, but I have enough common sense and basic math skills to understand that "fixed" means it ain't changing, and "adjustable" means it can change at anytime.
Problem is/was a lot of people I suppose didn't understand that.

Stuff like this is the type of skill that I'm referring to when I and somebody else in another thread spoke about classes or courses being required in high school of basic skills and understanding of how to function in life.

Re: This really erked me this weekend...

I guess the appeal is the very low interest rate to suck you in, but to think that the rate won't change because the current (at the time) economic climate is so good is insane to me.

I've always been someone that wanted to know exactly or pretty damn close to what my payment was going to be for the duration of a loan I have taken out.
I don't like surprises at all!!

Even with a fixed rate loan there are still fluctuations due to taxes, insurances. etc. that cause increases due to escrow (sp?) shortages, etc., but nothing that is devastating the way a lot of those loans were that got so many people in trouble.

I'm no economic guru, but I have enough common sense and basic math skills to understand that "fixed" means it ain't changing, and "adjustable" means it can change at anytime.
Problem is/was a lot of people I suppose didn't understand that.

Stuff like this is the type of skill that I'm referring to when I and somebody else in another thread spoke about classes or courses being required in high school of basic skills and understanding of how to function in life.

ARMs were beneficial to house flippers and speculators to whom housing was an investment, not a home. Then, greed took over and the initial low interest rate was used as a selling tactic aimed at the more gullible among us.

Re: This really erked me this weekend...

The review of the housing problem in this thread is typical "blame the minorities" coded racist innuedo, conservative bluster. It is no different than the previous threads that blame Democrats for poverty in this country because they stick up for the poor. Meanwhile statistics show the extreme wealthy getting richer and everyone from middle class - down becoming poorer; yet, its the democrats enabling the poor by restributing the wealth? huh? One has to say.

It is easy to debunk the bluster in this thread that allowing and even encouring people other than whites to buy houses was a huge mistake. Of course, no on this thread will admit that this is really beneath their language but as soon as they start blaming the government and using words like "minorities" the point is expresed.

The CRA was in 1977 opening up more lending to minorities because previous to 1977, certain area in cities, known as "redlining", were off-limits to lending for houses. Areas that fell within the "redlines" were predominately black so banks wouldn't loan money for houses to be purchased in these areas. Clearly this policy was racist in intent. In 1977, CRA denied this practice. Did the housing bubble occur as soon as blacks started buyiing houses? Nope.

The housing bubble began around 2000 NOT 1977. So what happened in 2000? Well, in 1999 three Republican Senators co-sponsored authored the Gramm-Leach-Bliley Act which repealed part of the Glass–Steagall Act of 1933. Glass Steagall limited commercial bank securities activities and affiliations between commercial banks and securities firms. In other words, Glass-Steagall prevented banks and securities firms from bundling mortgages which would disperse the risk asssociated with bad loans away from banks. The passing of the Republican Gramm-Leach-Bliley Act now opened up a "handshake" between lending banks and Wall Street. As a result, banks had less skin in the game while security firms passed bundled loans around making millions off the transactions. The Gramm-Leachy-Bliley Act was passed by a Republican House and a Republican Senate as well as signed off by Bill Clinton.

The housing crash has little to do with lending to minorities or else this crash would have occurred shortly after 1977. It has everyhting to do with the repeal of Glass-Steagall. Bill Clinton has a hand in it as well as the Republican controlled congress of 1999. Fannie and Freddie had their role as well but none of this woulf have occurred with the repeal of Glass-Steagall and it has nothing to do with the Community Reinvestment Act of 1977.

The ensuing bubble encouraged greedy Americans to buy more house than they could afford. It encouraged greedy Americans to refinace and pull unprecedented amount of money out their newly found "equity" and buy shit they don't need which ultimately led to them being unable to afford their upside down homes.

Now that I am back in town, I need to go through and correct all the misinformation that is running rampant.

Re: This really erked me this weekend...

Hey Galen, you just repeated what I said above about Clinton and the Fannies and Freddies.

No one mentioned Acorn which made bad loans to all those minorities.

Acorn didn't make loans. Acorn was a community advocacy group(s) that stood up for low-income families. This is why O'Keefe went after them and why O"Keefe is an activist hero to middle-class white conservative bigots.

I worked a lot along side of ACORN in New Orleans after Katrina when the insurance companies were royaly screwing black families that had lived in the same home sometimes for 7 generations. The lower 9th Ward was literally torn apart and its residents were bussed all over the country tearing apart what was once a very tight knit community. Outside of the federal agency that employed me to go down there and some compassionate National Guard, ACORN was the only group working down there to preserve this community while its residents were spread out all over the eastern half of the country.

According to WIKI:

ACORN members across the country, particularly in the Gulf region, have organized fund-raising and organizing drives to ensure that victims of Hurricane Katrina will receive assistance and will be able to return to affected areas. ACORN's home clean-out demonstration program has gutted and rebuilt over 1,850 homes with the help of volunteers. The ACORN Katrina Survivors Association formed in the aftermath of the storm is the first nationwide organization for Katrina survivors and has been working for equitable treatment for victims. Displaced citizens were bused into the city for the New Orleans primary and general elections. ACORN says its Housing Services have helped more than 2,000 homeowners affected by the storm and is an official planner working with the city on reconstruction.

As far as O'Keefe's antics:

Also from WIKI (since it is midnight but also accurate)
On December 7, 2009, the former Massachusetts Attorney General, after an independent internal investigation of ACORN, found the videos that had been released appeared to have been edited, "in some cases substantially". He found no evidence of criminal conduct by ACORN employees, but concluded that ACORN had poor management practices that contributed to unprofessional actions by a number of its low-level employees.[97][98][99][100] On March 1, 2010, the District Attorney's office for Brooklyn determined that the videos were "heavily edited"[101] and concluded that there was no criminal wrongdoing by the ACORN staff in the videos from the Brooklyn ACORN office.[102][103] On April, 1, 2010, an investigation by the California Attorney General found the videos from Los Angeles, San Diego and San Bernardino to be "heavily edited,"[9] and the investigation did not find evidence of criminal conduct on the part of ACORN employees.[9][89] On June 14, 2010, the U.S. Government Accountability Office (GAO) released its findings which showed that ACORN evidenced no sign that it, or any of its related organizations, mishandled any federal money they had received

Re: This really erked me this weekend...

Still playing the race card, heh Galen. We're not talking Katrina here. It's contributions to the housing bust.

So where do you think all these hundreds of millions of dollars in loans and contributions from America's
financial institutions went.

________________________________________________________

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.

Over the last seven years, Congress gave earmarked grants worth millions of dollars to ACORN, explicitly for their assistance in low-income housing. The original Dodd proposal for the bailout would have made millions more available to ACORN through the Housing Trust Fund, a slush fund Democrats established this year to support even more “community organizing” along these lines.
_________________________________________________

So, were you working with ACORN when the FBI
raided their offices for voter fraud like registering names like Mickey Mouse and members
of the Dallas Cowboys in 22 states.

But hey, why should that get in the way of Galen and his race baiting?

WARNING: This post may contain material offensive to those who lack wit, humor, common sense and/or supporting factual or anecdotal evidence. All statements and assertions contained herein may be subject to literary devices not limited to: irony, metaphor, allusion and dripping sarcasm.

Re: This really erked me this weekend...

But hey, why should that get in the way of Galen and his race baiting?

And where did I suggest that whites weren't the most "effected"(sic)?

Nice projection though. It reinforces the structure of my argument that conservative are mostly interested in making the housing crisis a race issue. My premise is that the deregulation of the banking/securties market is the cause while your premise is the open lending to minorities caused the crisis. Sure you try to couch it in this language of it not really being about minorities but more about government making it easier for minorities that caused the problem but your language continues to be coded (whether you are aware of it or not) with innuedos of race. When I blame the problem on the stripping of a government regulation that had been around for 70 years effectively regulating the mortgage business then all of a sudden, I am "race baiting". How does that exactly work? Projection my friend. You want this to be about race so you call it out as soon as you can with no mention of race on my part. Interesting.

You might want to check your projection as the truth of the matter is that we are all influenced by race. It is our projections that give us hints of our own racial prejudgements and it becomes our responsibility to learn from them. That is, if we want to be as least affected by race as possible.

WARNING: This post may contain material offensive to those who lack wit, humor, common sense and/or supporting factual or anecdotal evidence. All statements and assertions contained herein may be subject to literary devices not limited to: irony, metaphor, allusion and dripping sarcasm.

Re: This really erked me this weekend...

Originally Posted by Galen Sevinne

And where did I suggest that whites weren't the most "effected"(sic)?

Nice projection though. It reinforces the structure of my argument that conservative are mostly interested in making the housing crisis a race issue. My premise is that the deregulation of the banking/securties market is the cause while your premise is the open lending to minorities caused the crisis. Sure you try to couch it in this language of it not really being about minorities but more about government making it easier for minorities that caused the problem but your language continues to be coded (whether you are aware of it or not) with innuedos of race. When I blame the problem on the stripping of a government regulation that had been around for 70 years effectively regulating the mortgage business then all of a sudden, I am "race baiting". How does that exactly work? Projection my friend. You want this to be about race so you call it out as soon as you can with no mention of race on my part. Interesting.

You might want to check your projection as the truth of the matter is that we are all influenced by race. It is our projections that give us hints of our own racial prejudgements and it becomes our responsibility to learn from them. That is, if we want to be as least affected by race as possible.

It's not even the conservatives making this a race issue...the entire government made it a race issue way back when they determined that banks obviously were discriminatory against minorities and needed a law to allow families to take out mortgages regardless of whether or not they could truly afford it.

Frankly, anyone lending money should be discriminatory. Otherwise how do you ensure that you can get that money back?

It's not even the conservatives making this a race issue...the entire government made it a race issue way back when they determined that banks obviously were discriminatory against minorities and needed a law to allow families to take out mortgages regardless of whether or not they could truly afford it.

Frankly, anyone lending money should be discriminatory. Otherwise how do you ensure that you can get that money back?

When CRA was passed to end redlining, it ended the discriminatory practice of denying loans based on where you lived NOT relaxed lending standards. What relaxed the lending standards in the early 2000s was the realizations that mortgage lenders could bundle bad loans thus diversifying the risk of individual defaults. It worked somewhat like health insurance in that the more unhealthy people you can pool together, the cheaper the insurance becomes as a result of bundling individual plans. The relaxing of the loan standards was a result of Sen. Gramms bill as aforementioned not opening up home purchasing to people who lived within the "redlines". The bubble had nothing to do with race as those on this thread have been suckered into believing.

If you don't believe me just study the legislation, paying attention to the dates and synching it with the dates of the bubble and crash. Its pretty simple.